#61 – Multi-Million Dollar Internet Business Exits with Jeremy Schoemaker

About Jeremy:

JEREMY SCHOEMAKERJeremy “ShoeMoney” Schoemaker is a web entrepreneur, founder of NextPimp.com, ShoeMoney Media and PAR Program, and co-founder of the AuctionAds service.

He is a frequent speaker at search engine marketing and affiliate conferences.

Transcript:

00:16 Stephen Esketzis: Hey you guys, Stephen Esketzis here from Marketing on the Move, and today I’ve got Jeremy Schoemaker with me. Is that right, Schoemaker yeah?

00:23 Jeremy Schoemaker: Yeah, good job.

00:25 SE: Okay, cool. Well, we’ve got Jeremy here with us on the line today all the way from the States. Jeremy, welcome aboard. Welcome onto Marketing on the Move.

00:34 JS: Thanks Stephen, thanks for having me.

00:36 SE: Awesome to have you here. Yeah, so share with our audience a little bit about yourself and what you do.

00:43 JS: Yeah, so I literally tripped over a rock about… It’s been like 13 years ago, and I had a mobile website that I made just for fun and it got a lot of… Just long story short ’cause I’ve had a crazy life and if you care to read about it, I wrote a book that’s on Amazon and Barnes and Nobles, it’s just called the Shoe Money Story. But anyway, basically I fell over a rock and learned with AdSense. I literally was on unemployment, 50 grand in debt, bad shape. I was 420 pounds, smoked cigarettes like crazy and I was on oxygen and I was in horrible shape. And I met this girl who just really believed in me and really just kept encouraging me to do what I’m doing, and better my life. So I one day got a call from Google and they walked me through putting AdSense on my site, and I literally went to the bank with a $400 unemployment check and 134,000 or 132,000 I always forget Google check. Yeah, 132,000 I believe is the number. So yeah, it was a little weird on the banker’s face.

01:57 JS: Now since then I’ve basically looked at how AdSense made money and it was all affiliate marketers advertising on my site so I was like, “Okay, I’m going to jump into this affiliate marketing thing,” And then from there went to pay-per-click and because I was getting over 80,000 searches on my website a day for the ringtone mobile vertical. I could see like misspellings and all this stuff in real time, not a key word list, but I had my own real data so I built out a system that would bid on ad words. That’s really how I got started, which led to other things. And with the Google check obviously, Google was very proud of that because I was on unemployment…

02:37 SE: It’s a good story.

02:40 JS: Yeah, they kind of made me their poster child and I went all over the place speaking and probably did, I don’t know about 50 just from that alone talking about even though I didn’t use AdSense anymore, but they still had me do it ’cause the story and then it really went from there. I learned subscription revenue, and you know, even donation revenue, and obviously affiliate marketing has been my bread and butter for a long time. But also I’ve built you know six companies to date, or I’m sorry, I built probably 15 companies to date, six of which I’ve sold, one for 12 million, one for more than that and a lot of people know me as make money online category, but if you really look it up my major windfalls have been from legit companies that I’ve sold.

03:30 SE: So when you say, “Legit companies,” Are they online companies that you’ve sold or are they sort of brick and mortar companies?

03:35 JS: Yeah, so my mobile company, I sold that. I just started email marketing agency because we started doing some consulting for some large brands like Carnival Cruise Line, like Blue Electronic Cigarettes which is now owned by RJ Reynolds Tobacco, the largest in the world, and we come to find out that these guys they just don’t know how to do email. And everything from copyrighting to graphics to deliverability to sequencing funnels and all this stuff, they just don’t know what they’re doing and so for us to just manage it all and if they want to email out something, they would just give us the copy and we just handled everything for them and they paid us a lot of money to do it.

04:19 SE: How long ago was this company?

04:21 JS: This company I sold it in November, I started it about a year and a half before that and that one sold for, 12 but it was to be honest, we had less than 14 clients and we were doing like I don’t know, just many millions, almost eight figures in revenue just ’cause we’re dealing with big brands.

04:44 SE: What are profit margins on a company like that? I mean it’s funny because I just came back from Traffic and Conversion Summit and I heard Gary Vaynerchuk giving his keynote and what he said was, I think he’s getting close to a 100 million revenue something crazy like that and he’s talking that he had about 17% profit margins in his agency. So I’d be curious, is it anything close to that? Or like I don’t know what the kind of industry like that would lead with?

05:07 JS: Yeah, I’ve got some insight on Gary V. But we’ll skip that ’cause I like the kid, he’s a great motivational speaker, but yeah, anyway. Yeah, so alright. In profit margins, we were probably about 30 plus percent net profit so…

05:33 SE: That’s solid.

05:35 JS: Yeah. I mean a lot of the profit margins of the things I’ve done because I’ve had such low… I mean people think I’m this expert SEO but I’m not. I never even focus on SEO and even what I’m doing now, like I don’t give a crap about SEO but I’ve always ranked very very high so my profit margins have always been extremely high and my marketing techniques allow me to get my users for free, for the most part are very, very, very low cost of acquisition. So I mean, even my email marketing agency, I can talk about how we landed million dollar clients a year just from a very simple thing that costs me about a dollar. So, there’s just so many techniques out there that… I know Gary has a monster staff who has a monster sales team, and they’re just beating down the doors of everyone, selling them social media services. He’s not doing a 100 million in revenue, but…

06:35 SE: I’d be curious to have a look at those books. I’ll skip to them myself, but it’d be interesting to see… I’m sure there’s murmurs within the industry of what real numbers are, but yeah. We’ll leave that for another day.

06:46 JS: He’s an incredible motivational speaker, but I know Gary and his brother, AJ, from back when before they did anything on the digital point forum, so I’ve kind of seen the whole evolution from his rich parents owning a thing for them fronting him the cash to be on all these TV shows, and all that stuff. So he’s a hustler, and he’s got that New York thing, he’s got that vibe, he’s all aggressive, and all that stuff. And he’s a great motivational speaker. So I really respect him in that, and all that. Business-wise, I don’t know. I don’t know. So, but yeah, he’s a great motivational speaker. I don’t want to talk bad about him.

07:29 SE: No, no. Of course not. I know where you’re coming from. That’s really cool. So you sold, what was it? 12 or 15 companies now. That’s pretty crazy…

07:38 JS: Six.

07:39 SE: I’m sorry, six. But you’ve built 12, I think you said.

07:42 JS: I think the most impressive one was auction ads, which from start to finish, we sold it, we started in March, we sold it in July.

07:54 SE: In the same year?

07:56 JS: Yes. Four months later. And the figure, even though it’s been 10 years ago, I can’t… I don’t know. I can tell you it’s on the Wikipedia page. There’s… Somebody wrote it on there, and so… It says 17 million on there, so I can’t confirm or deny that, but let’s just say it was a big windfall for me, and everyone in my company, I made a millionaire. Even 12 dollar an hour people. So some even got a couple million, so…

08:30 SE: That’s awesome.

08:31 JS: It was a super…

08:32 SE: I was about to say, so what do you think was the big game-changer for that company? Obviously such a short time, such a big exit. What do you think was what made that company so successful so quickly?

08:44 JS: So, yeah, it was basically contextual ads built around the eBay API, and we’re… I’m pretty tech-savvy, and I have a lot of experience with very high scalable things. And I had a little bit of a nest egg from my Google revenue, affiliate revenue, and my website, which had Monster subscription revenue. And so I had money to play with. And so basically, I… The biggest thing was market penetration. So I went to TechCrunch, and I said, “What are you making for Google ads?” And said, “Actually, don’t even tell me. I’ll pay you 10% more to run auction ads.” And then I went to a mixed martial art site, the biggest one, and I said, “Hey, you’re running Google AdSense, I’ll give you 10% more to run mine.”

09:29 JS: And then I went to Buddy TV. Same thing. So in every vertical, I had market penetration. And the cool thing about that is that everyone, no matter how small they are, or their competition, runs it. Because you went to the biggest. So that in itself was huge. And then the cool thing about it was, just like Google, it was powered by Google, or whatever, and only ours was powered by auction ads, and it contained, everyone had a built in affiliate link, which we paid 2% of whatever you referred to people. And then I tried… My marketing strategy… I had a 10 point marketing plan, and I only got to phase four before we sold it, but another thing was, “hey, sign up, we’ll give you five bucks in your account to be a publisher,” And all you gotta do is make 10, right? ‘Cause I knew…

10:21 SE: ‘Cause you knew that the funnel worked. Yeah.

10:23 JS: Yeah, I knew from my affiliate days, is all somebody has to do is… The biggest problem that affiliates have, or I should say advertisers to get affiliates to do something, is affiliates become lazy and complacent. And I know, because I’ve been one myself. And there’s all these offers out there, and people tell you to switch, but there’s really no incentive to do so. So if someone comes to you, like I did with TechCrunch and says, “Hey, I’ll pay you 10% more, and I’ll pay you upfront. I’ll pay you right now, write you a check ” How do they say no? So that was… I always say you gotta be willing to do what others are not.

10:58 JS: And there’s nobody else that would do that. And so… And also I paid out a 100% commission. So everything… So I leveraged my massive affiliates and payouts so that I could get, I was getting $22 per new user, where if you start out with eBay, you get six. Right? So collectively, I was getting 22 users for, 22 buck for the network, and I passed all of that onto a publisher, no matter how smart you were. I didn’t take any margin. So, when I sold the company, I was actually about a quarter million in debt.

11:33 SE: Isn’t that interesting? It’s all because you knew your numbers… You know what your front-end costs are, your back-end costs are. And at the end of the day, it allowed you to play with those numbers.

11:43 JS: You know what’s weird? Is I’m not a very good business person. And a lot of people laugh at that ’cause they see these kinds of things. And all I focus on is, number one, traffic, ’cause if you don’t have traffic, you’re not going anywhere. Number two is user acquisition. What does it take to get users? And number three is monetization. So, I was only on user acquisition. Okay? So, all I cared about was getting more and more publishers. Getting more and more publishers. And yes, I was losing money. And you can do this over time. I was just in a position where I could cash flow this. And I’m in a similar position with what I’m doing right now. And so, basically, I was just so focused on user acquisition, that I knew that once we get to a point… That this is the thing; Once you show up on other people’s radar and… EBay came to us with the first offer, because they were trying to do the same thing that we were doing, but they were…

12:43 SE: You did it better.

[chuckle]

12:46 JS: They were over $5 million in development, and they’d been working on it for six years.

12:50 SE: Yeah.

12:51 JS: And they weren’t even close. So it was so funny, ’cause we’d have conversations with them about getting a higher payout, and they were like, “Okay, we’ll give you a higher payout, but you gotta meet with our staff.” And they’d be like, “How much time do you spend of customer support? How much time do you spend on this?” We had no customer support. I mean it was… We had like three people and it was like, “Hey, if you can’t figure out how to do it, you’re dumb.” I mean literally, that was our customer support. It was… We had a great product. And it’s simple to use and honestly, if you can’t figure it out, then okay… Then it’s not for you.

13:21 SE: That’s it. Yeah.

13:23 JS: Yeah. I mean, that’s a jerk response, but I didn’t have time for customer support.

13:28 SE: Yeah. Yeah, that’s such an interesting way of… When you see eBay coming to you, you know something’s up. You know that there’s a big opportunity there, because they can’t do it with that sort of capacity. And it’s funny, because a company like eBay probably has a lot of fat around it. It’s not as lean and agile as a company like yours would have been back then. Now I think, it just shows you, new companies these days and even 10 years ago and whatever. I think that a fresh company out of the box that’s driven, motivated and has a bit of backing it can just cause such a disrupt.

13:57 JS: Yeah.

14:00 SE: So, it’s an interesting thing. So, tell us a little bit about what you’re doing now. What are your main projects now? What are you working on these days?

14:07 JS: Yeah, so I got really tired of the email marketing agency about four months before I sold it. It was like, “No more clients. We’re sticking with the ones we have, and I want to sell this company. And actually, I am going to buy out the lease on our office. I’m gonna buy out our internet. I’m going back to my basement. You guys are all working from home.” And it was when I hit 40 years old. I just had this epiphany of like, “What the hell am I doing? I’m paying $40,000 a month for this office.” Like 70 something total in overhead a month. And I’m just like, “What the hell am I doing?” And I wasn’t happy. I just hated client work. I just hated it. And so I just was like, “I’m gonna sell the company. We’re all working from home. You should all start looking for another job. I’m not gonna fire you tomorrow, but this is not a future for me.”

15:02 JS: And so, in doing that, I actually found my new thing, which was… I came up with this concept and I was talking with some other marketers. John Reese and Frank Kern, and some other guys, and I was just like, “Gosh. You know what would be really cool?” We just got to brainstorm and we were talking about how cool it was when we made our first dollar on the internet. And it was just like, whether it was offline, online… But Kern, it was online, and he was just like, “You blew it away.” You know, whether it was your first dollar or, depending on what you sold. When I made my first dollar online, I was just like, “This is amazing.” It was a more exciting feeling than when I made my first million by a thousand times, right? ‘Cause you’re making money, you see how it goes. You’re like, “Wow. I got million dollars. That’s awesome.”

[chuckle]

15:48 JS: But you know when you make that… It’s just such an excitement of love. So, I was like, “You know what would be super cool, is if I could give that feeling to someone and not have them buy a product from me. I don’t take a dollar from people at any point in time.” So I came up with this idea of like, “Let me pay you to make a website that makes money online.”

[chuckle]

16:14 SE: Right.

16:16 JS: It sounds crazy. So, basically it just starts out… You share a link on Facebook, which can be… I mean, sometimes we switch it up and you tweet out something or you do… All I want you to do is show me that you’re willing to do something.

16:31 SE: Yeah.

16:32 JS: And then I send you a dollar in real time through PayPal. There’s no waiting. There’s no… And believe me, that was some cowboy crap when I started, and I got my ass handed to me in fraud.

16:43 SE: Shit.

16:46 JS: But it’s fun. It was kind of fun. And then I built out this really cool thing where… It was really based for people who were really curious about how to make money online. Not even like your… Your seasoned marketers, definitely not for. I think there’s so many people who buy these $2,000 products and all these products that are $97 or $2,000 and they’re so advanced. And they don’t even have a website. So this one was really designed to get people up and running on a WordPress site. Make it look good. Not spend any money, but make it look good, you know? Get email marketing integrated, get the right plug-ins you need to make it social mobile friendly. And then get email marketing in, get social media set up. And I pay people a dollar for all these tasks.

17:33 JS: So they install a theme, I pay them a dollar. A plug-in, I pay them a dollar, or whatever, whatever. And I back it out with web hosting. We have a couple of sponsors from different web hosting companies, that pay us a commission on web hosting. And we’re getting 2,000 users a day, and not all of them sign up for web hosting. A lot of them just go through the program. But it’s really cool. I do a live chat every other week and we’ll get six, 7,000 people on there and the chat goes crazy. But I have three staff members. I have four full-time support people so little things have changed.

[chuckle]

18:16 JS: They actually answer all the questions as fast as they can and they just private message back with people, answer questions. So it’s really like a dream come true to me and even though I’m not making money with it yet. But that’s okay. Because the cool thing is by the end of this, it’s like people… They didn’t buy a product. Maybe they paid for web hosting for a year or couple years, and what they ended up with is something of value. They have a website. They have email marketing integrated. They have social media and they have everything tied together so that when they make a post, it posts to their social media, emails out to their subscribers which brings people in. Then they can go on their social media or sign up for our assessor. Everything works in this big giant circle.

19:01 SE: Yeah.

19:02 JS: Let’s say they do a review of a grill or something. Well, that grill might be $600 bucks so it’s on Amazon. They get their 8% commission on that. It’s like $60 bucks, or whatever. Then it’s like, “Oh, wow!” I, even at the end, teach them how to a review and if they spend $5 bucks promoting that post on Facebook, I reimburse them $5 bucks.

19:29 SE: Yes. It’s a new edge marketing strategy, yes? . It will be interesting to see how it plays out over the long-term ’cause obviously, that’s the game.

19:37 JS: Well, where we’re at now is… And again, this is one of those things where once you’ve have user acquistion… Like I said, today we had 3,300 double opting users. Okay, so once you have enough users going through the thing then you have the needle and people start to see this. So now we’re having companies like ClickBank come to us and say, “Hey, we want you to build a module in there around ClickBank, and we’ll pay you X-amount per month to do this.” Okay, we’re getting other companies like Microsoft. I just got a call from Microsoft the other day who is like, “Hey, what do you think about making one around Bing advertising?”

20:18 SE: Yeah.

20:18 JS: Now, it’s starting to come together. Honestly, I haven’t lost that much money. I think I’m down a decent five figures.

20:29 SE: Yeah.

20:30 JS: It’s like I said, it’s about user acquisition. The thing is, yeah, could I sell these people a product? Absolutely. I could sell these people a product and these people love me so much that… I mean I’ve sold $5,000 products. I know I could sell products all day in there but I don’t want to. I dont’ wanna take money from these consumers. I want to give them value and when these other companies like ClickBank and other things, they see what I’m doing and it’s not sketchy. They’re like, “We want to be a part of this.” That’s a cool thing is that I’ve never taken a dollar from these people which is, by the way, awesome ’cause I don’t have to worry about refunds or any of that crap. It’s honestly like a dream come true. I feel like I kind of wanted to retire after the PAR Program, but this thing just took off and now I’m back into it.

21:19 SE: Well, this is cool. The good thing is when you’ve got companies like ClickBank and Microsoft and all these guys wanting to work with you, number one, they’re not gonna refund you. So the money you’re taking isn’t from the consumers, it’s from B2B, right? So that’ll be… The interesting bit is the growth capacity could be huge. If this is just the tip of the iceberg, ’cause it’s the beginning. It’s got a massive road ahead of it.

21:41 JS: I believe so and the thing is, last month, we were Bluehost’s biggest affiliate. We haven’t been doing this for that long. Okay? We were the other company we were using, we were their biggest affiliate and it’s kind of crazy because we haven’t been doing this for that long. The other thing is, I’m not buying that much in advertising.

22:03 SE: Do you mind sharing the website or is it still on the down-low?

22:05 JS: No, no. It’s shoemoney.net. It’s no big thing.

22:07 SE: Oh, shoemoney.net. Cool. Just so people can go check it out. That’s all. But yeah…

22:12 JS: Yeah. This is hilarious, right? ‘Cause I’m sitting there thinking, what domain should I get? What domain? And I’m like okay, website.ninja, internet marketing… ‘Cause it’s kind of based around a karate belt system, right? So you become a yellow belt, red belt and it’s super cool because we had to work with Facebook. Gosh, that was like a three month deal to actually get them on board with making a… We made an application to where people can share their belt levels with an application, not just a share button. So, that’s a big referral which also actually, this is a cool part about it. If you go and sign up and you make your dollar, I think it’s about three minutes until you get paid your dollar through doing that and you can stop there if you want.

23:00 SE: What’s the minimum payout? Do you get them to do a certain amount of tasks before they can get paid out?

23:05 JS: No. It’s literally like there’s only a very minimal one task and then you watch a video which I explain… Why did I just give you a dollar? Then the next video leads into… Then you get it in real time through PayPal. There’s no waiting. There’s no nothing. Like I said, it was…

23:26 SE: So this is really interesting. It kind of reminds me of the surveys that people had to do. I don’t know if they’re still around. I think they’re actually big affiliate offers back in the day. Where you have to complete a survey and get paid on a per-survey basis but this is the cleaner, less sketchy version of that.

23:41 JS: Right. Yeah. I don’t get anything out of it, right? Except when we’ve been split testing in. We give them an option of, “Hey if you wanna share the Shoe Money network, it’s gonna benefit me. But here’s how I’m gonna benefit you, is that you’re getting paid a dollar right now, so, when you share it, it’s gonna contain your referral link. And everyone you refer, if they make a dollar, I’m gonna send you a dollar as well.”

24:15 SE: So that’s awesome. You bring on a super-affiliate, and you’ll get paid super-affiliate plus whatever you’re making?

24:22 JS: Right. So let’s say you do it, right. Let’s say you go in there, and you make dollar. And then you share on Facebook, or whatever, “I made a dollar through whatever… ” Whatever you wanna do. And then it automatically will give you your referral link. Well then let’s say 10 people will go and they make a dollar, well then you make $10.

24:40 SE: That’s awesome.

24:40 JS: Right, so… And then actually it goes all the way through, so when they…

24:44 SE: So it’s like, second tier, third tier, the whole lot.

24:47 JS: We don’t do multi-tier, ’cause I don’t want this to be an MLM.

24:51 SE: Right.

24:51 JS: It’s just a single-tier, if you refer somebody, then when they make money, you make money. People could perceive it at that, but it’s all coming together, and yeah, I definitely do not want this to be an ML… There’s a lot of rules around MLM stuff too, and so, once you get into…

25:14 SE: It’s a different area.

25:15 JS: Yeah, once you get into a third tier and stuff like that, you’ve gotta go through legal. It’s a big… I hate MLMs, there’s this little thing…

25:23 SE: Yeah, I couldn’t agree more.

25:25 JS: It makes my skin crawl.

25:27 SE: Agreed.

25:29 JS: And it could be good, I don’t know, it’s just not for me. John Chow promoted that MOBE thing, he’s made two million bucks with it. And I think that’s great, and I’ll be honest, if I knew that, I would’ve done it. [chuckle] ‘Cause he came to me first, and I was like, “Bro, I’m just not into MLMs.” I actually met the guy in person, at a event in San Diego, and he was talking to me about it, and I was like, “This sounds like a great idea, but it’s just not… ”

25:53 SE: It’s just not me.

25:54 JS: I’m just not into that kind of stuff.

25:55 SE: Yeah.

25:57 JS: Like I said, my whole thing was putting a buck in people’s hands. I just made my first dollar online, and then have them going through it, keeping them motivated by paying them to do the task, and it just is cool, ’cause 80% of the people that sign up for web hosting, they go through the entire thing, they’ve got their site all online. And then we have what we call the Ninja Levels, where we have… I’ve gotten content from… I’ve got Frank Kern, people know who he is. He really had an impact on my revenue through list stuff, and I still use a lot of his same stuff, and I just actually got off the phone with him. He’s actually remade a course inside of our system, and it’s free in there. We’ve got… I brought in an expert on Pinterest, on how to make the sizes. I’ve watched the thing, and I’m like, “I didn’t know that.”

26:50 SE: Yeah.

26:50 JS: And how she drives traffic, and we’ve got a YouTube expert in there, and how he does it, and what he does, and he’s about… It’s crazy. So, the content just keeps getting more and more, and like I said, we have a bi-weekly chat with our users, and it’s like, “Hey. What else, what can we make for you? What else do you wanna know?” And so, I bring, if I don’t know how to do in the best, then I bring in people that do, ’cause I’ll be the first person to admit, like, “Hey, I’d never talk about theories, and stuff like that, and I just will share my experiences, and what I know, and if I don’t know how to do certain stuff… ” You ask me how to do SEO, I’ll tell you, “Build something that people wanna link to.” That’s my strategy on SEO, that’s it, that’s all it is. [chuckle] I don’t use keywords, title tags… It’s pretty much built into WordPress on my blog. But yeah, I rank for a lot of stuff, but it’s ’cause people like the content and want to link to it. And that’s all I’ve ever done.

27:47 SE: Yeah, that’s cool. I think that’s gonna… If it hasn’t taken off already, it’s not gonna be long before it does, because that’s something which really delivers that output from value that we’re talking about. Like you were saying, for SEO, write stuff people wanna link to, we’re not saying with the content and user acquisition, just put stuff in front of people that they wanna learn, or that they wanna share, and wanna take action with. So I think that’s a really, really interesting model.

28:08 JS: Yeah. When you build something of value, whether it’s an application or it’s a website, like my blog… This is one of my things that, looking back, I did an interview and I was like, “Wow, that’s actually… Wow, that’s interesting.” ‘Cause everything I’ve had a major windfall on was never designed to make money. It was just like, “I just wanna make something cool that didn’t exist that I wanted for myself, then I let other people use it for free,” And then the money was a side effect.

28:37 SE: Yeah. I think that’s how it is most of the time, isn’t it? It’s not the sort of, “Oh, crap, I’m gonna go make money doing this specifically,” And blah blah blah, it’s more like, “You know, it would be cool doing this.” And then those things are usually the most successful out of all the projects that people are running.

28:54 JS: If you look at… And this is why, in the training program, when we first were like, “Yeah, we’re gonna install WordPress and it’s a blog platform, and maybe you don’t wanna be a blogger, and that’s cool, I get it. But let me just share with you that there’s been more self-made millionaires in blogging in the last so many years than in the history of America, in the history of the world.” And if you look at Perez Hilton, I remember when he was Mario in Digital Point forums, and he was starting his celebrity blog. You look at Mike Errington, he started blogging because he loves mergers and acquisitions. I could literally give you hundreds of examples of people that, “I Can Has Cheezburger?” The stupid cat captions. Those guys did this for fun, and then they sold the company for millions. They sold the site for millions.

29:44 JS: The FAIL Blog guys, same thing, sold the site for millions. Yeah, you could go on and on. Jason Calacanis started Gawker for a million, and sold it for $27 Million to AOL. Arianna Huffington, the Huffington Post, started as something that she was interested, and so I always tell people like, “Look. If you’re chasing the money. Like, you here blogging about a certain subject is gonna yield you a lot of money. You’re gonna get burned out after like a month when it doesn’t.” But, you should start a blog because it’s something you care about, and you would do it for free. That’s how I started Chew Money. My first post was How I met Paris Hilton. And it was about like… Yeah.

30:26 SE: It’s so funny how it makes a full circle like that. It’s always so true, but then… I think, you know what’s funny is taking your own advice on that sort of thing, and I’m sure you may have been there before, I know I’ve been there before, is like, “You know what? I’d love to do this ’cause I can see it’s such a big opportunity. The money’s there.” And then when you go do it you just fall flat on your face, because you know when you got that, It’s like literally what we’re talking about, if you just follow something you enjoy, that something that you’d blog for free about, that’s where the money is. It’s just, it’s something which… Like, it’s happened to me before. I don’t know, has it happened to you? Where you’re like, “Man, this is a cool opportunity. There’s so much money in that industry.” And you go follow it, and then a month in you’re tied up and you’re bored and you go back to what you were doing.

31:02 JS: Yeah, it absolutely has happened to me ’cause I’ve seen certain industries make money and I have started the company for money, and here’s what happened… Like, I told you my strategy on getting traffic first, and then user acquisition, and then make money. And when I start from making money and then go backwards, a lot of times… I have a company called Link Control, which if you wanna see it, it’s at ec2.linkcontrol.com it doesn’t even have link… I mean, I’m the biggest, I’m the only user of it. I never actually launched it. I put like 300 grand into it, but it was focused first on making money, and then I never even got around to… And then it was backwards, and I was like, “Ah fuck it.”

31:44 JS: And, I made another site called Offer Pools, which I still think is an incredible idea and it’s all done, and I never launched it because I was focused on the money first, and then I never even got to… The thing is, this is the thing. People come up with these great ideas to make money, but they don’t even know if people are interested. So that’s why you’ve gotta get traffic, and then user acquisition, and then… You can get some of the traffic for free. And that’s what I say, ’cause everyone’s like, “I don’t have a big budget for traffic.” Well, there a lot of traffic sources out there you can get for free.

32:19 JS: It’s just a matter of like if people are interested in the initial actual offering, then you build, like you could have a “Coming Soon. We’re gonna so this cool thing.” And then you could have, then that’s your user acquisition. You tweak that front page, and then you actually make some stuff. When I started the ShoeMoney network, it was basically like you signed up, it was the worst looking page, you signed up, you went through the first two levels, you signed up for web hosting and then it was like, “Coming soon. Other stuff.” I swear to God that’s what it started. I swear to God. And, I mean all these people did it, and they were like, “When are the other belts coming out?” And I was like, “Fast as I can film them?”

33:04 JS: And it was kind of a wreck at first, and then I was like, “Okay, let’s redo this content so that it’s all flowing in line.” And we’re actually even redoing it again. So, I’m constantly making the user experience better. And the people that are going through it, I get so many messages a day that it’s just like, “Wow. This is really awesome.” And, I mean people can do it with a free site. They can do it with Blogger, they can do it with WordPress, the only problem is if you actually do all this work on there, they limit you on what you can do to actually make money. They’re so much against affiliate marketing. I don’t even know if you can put AdSense on WordPress.com. Maybe you can. I don’t know.

33:48 SE: I haven’t used it, to be honest. I’ve always gone on my own sort of domain, whatever it’s called.

33:53 JS: Right. I mean, you can do… Or you can pay $3.95 a month and have your own thing and your own freedom. And that’s what I try to explain to people. Well, I do, and I’m like… My biggest pitch on web hosting is, “Let’s put this into perspective. If you buy a textbook at a community college for one course, it’s gonna be less than two years of web hosting. And I don’t know that one course has taught me how to make a career.” You know what I mean?

34:17 SE: Yeah. Isn’t it… Yeah, It’s kind of like… It’s funny the different levels of education you can go through, right? You can have your college degree, which is, what, like 30, 40, 50, hundreds of thousands of dollars, and then you can go online courses, which are usually like between 5, 10. And then you got masterminds and things like that. There’s so many different levels of learning and knowledge and how much you can spend for each of them. It’s just interesting to see where people gain the most success at. Is it at that sort of stage where they spend all the money in college? Or is it at the stage where they’re learning it themselves for free? Or is it at the stage where they go through and they pick up a course and they go through it? It’s really interesting to me.

34:56 JS: Yeah, it’s very interesting in that I don’t know many successful, I would say, affiliate marketers who have any college. I mean, barely any college. Most of them have the same as me where they barely graduated high school. I know one of them who, I don’t wanna say his name, but he’s actually been public about he was badly addicted to heroin after high school, and he’s one of the most successful affiliate marketers I know. He’s made a lot more money than I have. And you see those, and that’s the amazing thing about the time we’re living in. You had to have a college degree to get anywhere in life a couple years ago. Well, what seems like a couple years ago. To me anyways.

35:40 SE: Yeah, yeah. I think it’s all changed, to be honest, I think like… Yeah, it’s definitely changed. For me, for example, I went through high school, I finished that, and then went through university here in Australia and got through pretty much halfway and just sort of never went back. Started focusing on my email marketing and just enjoyed it so much more. So, there’s so many stories like that where you don’t stay at university or college. Or you fall that halfway or even to high school where you don’t finish it. And it’s just such an interesting way, like all these people and you, myself, everyone else in the industry who just self teaches themselves. And then you just gain such a good knowledge and you compare that to people outside the system who don’t have that motivation, who just worked there nine to five. It’s crazy. I don’t know, it’s the kind of stuff like I guess people don’t really think about it, it just passes them by. Whereas us marketers and entrepreneurs, everything, we think about things a lot more. We’re a lot more switched on I’d guess.

36:34 JS: Yeah. And it’s funny because the guys I do know, I know one who’s got an MBA. Actually I know two who have done very well for themselves, but they built real companies. And it’s interesting I refer to them as “Real companies.” The guy who has Buddy TV, which I’m an investor in, largest TV site on the internet. He has an MBA and he’s extremely smart and he’s a high level guy. And the guy who owned Tex Link Ads, Patrick Gavin, MBA, extremely smart guy. But affiliate marketers, like almost all of them, I mean there’s a lot of em that are in high school. Yeah, it’s amazing. And it’s interesting the ones who studied Psychology, are the most… Of any one I know in college their major was Psychology. ‘Cause that’s really the bare bones… They didn’t do Marketing or Economics, they did Psychology. Because what they teach today in Marketing and Economics is like not, I don’t know. I don’t know where that’s gonna get you in life.

37:46 SE: Yeah. The last class that I left, which was a marketing class, was so far behind the eight ball, it wasn’t funny. I think they mentioned the word like “Traffic,” I think once in the entire whatever course that I was doing. It was crazy. It’s just a different level. It’s kind of like a whole other world being online doing what we’re doing, compared to like what’s being taught in schools and things like that. It’s interesting.

38:11 JS: Yeah, when I go speak at colleges to some of these courses and stuff there. I did one at the University of Nebraska not to long ago and I talked about affiliate marketing and all this stuff and somebody said like, “Okay, what can you do to make money online like tomorrow?” And I said, “Well how about we try it right now.”. I said, “Who here wants to try something?”. And so, everyone raised their hand and I picked this cute girl, of course. And I brought her up there on stage and I said, “Okay, we’re gonna log into my commission junction account, we’re gonna grab an insurance offer which pays out five bucks if people fill out a form. And then you’re gonna go to Craigslist and you’re gonna go into the local Nebraska forum and you’re just gonna say ‘Hey I’m thinking about switching auto insurance. Has anyone tried this company?’ And I’m like, “Okay go sit down.”. So then I continue with my talk, whatever and then at the very end I showed the results. She had made 15 bucks.

39:07 SE: That’s crazy.

39:08 JS: And I said, “Okay everybody.”, so then this class was over and everyone just stayed.

39:15 SE: Right to the computers.

39:16 JS: What else can do? Can we just do Craigslist? And I’m like “Listen, if you do what I just did, it’s not gonna scale. I’m just showing you like the basics of how it works. Like you’re gonna get banned from Craigslist.”

39:25 SE: [chuckle] That’s awesome. I love that though. It’s actually a good way of just proving the point, right?

39:32 JS: Right. And some of em made the remark of,”What are we doing in college? We can make money right now.” And I said, “Well it’s not for everyone.”. And this is the problem with selling a product that’s like $2,000 is, okay I just showed you social proof of what I’m doing and I’ve been able to scale it in certain verticals. But that is not a scalable thing and you, just don’t quit college to do this. If you want you don’t have to quit your day job, you don’t have to quit college.

40:02 SE: Keep doing it on the side until it’s worth it.

40:06 JS: Right, absolutely. Even me, my wife was like… ‘Cause I actually had an offline business back then before I filed for unemployment, where I would do some stuff and my wife was just so encouraging about it. And she was like… Cause I was in computer security for Wells Fargo and then when I moved to Omaha, Nebraska I had to let go of that and then I got a job there and then they shut down, whatever. So I got on unemployment and then I had an offline thing, but there’s just, there’s so much opportunity on the internet. And I try to explain to people all the time, I’m like, “You know what? There’s so many people in this world that are existing and there’s some that are living. And if you’re happy with your job, then you’re living and that’s great. But if you’re not then you’re just gonna go through this life existing on the planet and that’s sad.” You know it’s really sad.

41:01 SE: Yeah. Hopefully, let’s end this on a high note. We’ll finish it up pretty shortly, last question. What’s your most successful experience you’ve had in business? Give us one of your highlights that you can say, “Man this strategy dominated my growth. This affiliate marketing campaign that I did just absolutely crushed it.” Give us one of your highlights that you’ve had in your career so far.

41:27 JS: Okay, so I’ll give you one of my favourites. Which I don’t think I’ve ever talked about this to much. So last year I was having fun and the Nebraska fans here are insane about football. Right? So we have the Corn huskers and that’s all we have, I mean we don’t have any pro teams. So I made a site, it was called like huskerfanpoll.com or something like that. I forget the name of it.

41:51 SE: Yep.

41:52 JS: And, basically, you would go there and I, basically found all this Q&A online. And I got all of these questions and answers options from it, and it was like “Challenge your friends to do all the stuff. ” So basically like no matter what you selected, it would go to a page and it says, “Hey, congratulations! You scored 84th percentile. You won a free month of Netflix.” [laughter] Which Netflix paid $45 on a free trial.

42:22 SE: That’s awesome. How did that convert?

42:29 JS: Well, here’s the thing. So I was…

42:30 SE: Is it still running? Did it convert it that well [laughter]?

42:33 JS: No, ’cause the season’s not running right now.

42:35 SE: Got it.

42:36 JS: But here’s the thing, there’s no reason why somebody couldn’t take this and do it for every college in America. I mean like…

42:41 SE: Man, you just gave me an idea now. I’m gonna go run off and do it for all the Australian teams. Like how cool is that?

42:47 JS: Well, and you know how crazy people are about their team. So let’s say it cost me $5 per user acquisition.

42:54 SE: Yeah.

42:54 JS: Right. Who actually did it…

42:56 SE: And you drove this through paid traffic, right?

43:00 JS: Right.

43:00 SE: Yeah.

43:00 JS: Right. Through Facebook.

43:01 SE: Through Facebook, got it.

43:01 JS: Because you can target people that are…

43:03 SE: You can target people that will follow that page.

43:05 JS: You can target people in Nebraska that are fans of football [laughter] I mean it’s not hard and you can actually… Here’s the best part. You can target people that went to the University of Nebraska. I mean that’s even…

43:16 SE: You know what they do… They’re more crazy like… You probably don’t even know a full blown website. All you need is like a quiz with a landing page on it and then on the thinking page, just send them a Netflix code or something like that.

43:26 JS: Well yeah, you just send them your link. I mean that’s it. So here’s the best thing. It was like… I made a… After they would go to Netflix, it would open in a new window but then on the main page, there was like an interstitial that says, “Hey, If you wanna challenge your friends, click here to share it on Facebook and It would scare this thing about, ‘I scored in the 92nd percentile of my Cornhuskers knowledge. Can you beat me?”‘ and then they would bring…

43:56 SE: That’s crazy.

43:57 JS: This was the thing. It’s like for every click I would pay for, I would get over 20 for free.

44:04 SE: Wow!

44:05 JS: So I mean those are the things that exist. So I just told you like one little… I mean I play around with so much stuff and it’s always amazing, like… I mean I don’t wanna sound like a… ‘Cause I do a lot that don’t work. But the cool thing in this is what did it cost me? Like really. What did it cost me?

44:22 SE: Well, yeah, it did but not with 100 bucks.

[laughter]

44:25 JS: It cost me a little bit of time to put the sites together, which I actually hand coded it but now, looking back, I probably should’ve done something simple, but it took me less than four hours to put it up. You know I had to find the…

44:35 SE: Man, that’s awesome!

44:36 JS: Yeah, I mean let’s all…

44:37 SE: Well whoever’s listening now… All the listeners’ I guarantee are gonna go start implementing something similar to that and it just shows you that if you play around with enough ideas, one of them will come together. And that’s some cool idea that you had. You’re like, “I wonder if this will work?” Go whip it up and the next thing you know is you’re getting 20 free clicks on every dollar you spent, which is nuts.

44:56 JS: Yeah! That’s the great thing about Facebook. Is that I found that… I don’t wanna get too much into this because it… But let’s just say that… Well, I don’t wanna get too much into… But let’s… [laughter] Basically, like you can do… Let’s say you’re in the pay day loan vertical. Facebook would not… I’m just giving you this crazy example that Facebook would never allow you to advertise.

45:22 SE: Okay.

45:24 JS: But let’s say when you got a pay day loan, it posted to your wall like, “Hey, I just got a loan from so and so,” Or like, “Come join me,” Or whatever. So now, you’re getting clicks from Facebook that you couldn’t…

45:40 SE: Yeah. It’s funny because I did something similar like this. I used to run an iPhone app, and we did this in the night life industry. So getting into night clubs and bars and things like that. One of the things we did was like you claim a free drink and you check into the actual bar on that club when you’re there, and you just check in and you get your free drink. It would just cause a wildfire in shares through Facebook. And you can probably still do it now. It just shows you like if you don’t go directly through pay but you actually use the system of sharing and growing that virality in the traffic, it’s just so much traffic in that in itself.

46:14 JS: Right. Like it’s in your Facebook… They do combat this to exploit it with what they call a Link Shim and you can actually Google it and find out there thing on it. It’s like if enough people say, “I don’t want posts like these,” or “I don’t like them,” Then they’ll still work but they won’t share as much on people’s stuff but they’ll still share on your wall. So the people that come to your wall. If it gets bad enough, then they’ll actually put it an interstitial page which would say, “Hey, you’re about to leave Facebook to go to a site that’s a third party,” Before they can go to your site, which on some of the things I’ve seen… I’m really impressed that it hasn’t triggered that. So I’ve only seen that with a couple of things but yeah, for the most part… And you can actually see that in your referrals because they use a… Because most of it is like, “l.facebook.com,” Or something like that but if you see like an LS, then that means it went through the Link Shim.

47:14 SE: That’s cool. That is phenomenal.

47:15 JS: Yeah, there you go. Somebody did a really good write up about, it about how can I tell if it’s doing it and it is. ‘Cause I can see some of them through… Even my blog. When people share my post. They’ll do like one or two out of a 1,000, I’ll see a couple of them go through.

47:35 SE: Man! That’s cool. That in itself, that’s a cool tip right there. So I think our listeners are gonna be over the moon with something like, that but I appreciate you sharing something like that as well. So it’s awesome to have that sort of content come up. Man, thank you so much for joining us today. It’s been awesome with you running us through some of your experiences, your experts, your business start ups, your tips and tricks. If people wanna find out more, where can they reach you? Or where can they hear more from your content.

48:02 JS: Yeah, I have my own podcast shoemoney.com/radio. I don’t have any links on the site actually to it, but we try to do it every Tuesday, but it’s kind of hit and miss. I’m also just shoemoney.com, just contact us, link, we’ll go to, it goes to me and my two assistants, so a lot of times I’ll respond, or a lot of times I’m busy, so they’ll jump on it before me. A lot of people write, we get probably 200 to 300 a day, a lot of bots, a lot of, even though we have captchas and stuff. You might have to actually try it a couple times, so for the most part, it’ll get to us. How did you find us?

48:47 SE: I think mine was through ShoeMoney, the website, as well.

48:50 JS: Yeah.

48:50 SE: I know there’s a couple of guys that we’ve had on in the past, think Charles Ngo, couple of those guys, and it’s just come up in newsfeeds and things like that. We’ve had a couple of affiliate marketers on this podcast in the past as well, so it’s good. We get a real mix of people on here, we had guys like Neil Patel, Lorraine Fisken, and we’ve also got affiliate marketers, so a lot of it’s seeing all the different perspectives of the business models and things like that, so it’s exciting stuff.

49:15 JS: Yeah, me and Ren couldn’t be different. Me, I love Charles Noel, I mean he honestly, I admire him a lot and I hold him in high regard, very smart, Neil Patel, I go way back with, I was buying that kid drinks before he was legal, I didn’t know it. Yeah, very smart guys. You’ve got a good show here, you got some good guests. So thanks for having me on, Steven.

49:36 SE: I appreciate it. Thanks for jumping on, I know it’s probably getting late over there, it’s probably getting towards 5 o’clock summer time or something like that.

49:43 JS: Yeah.

49:44 SE: No worries man. I appreciate you coming on, and we’ll catch you later.

49:47 JS: All right, thanks.

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